Grocery retailer Pick n Pay will start providing mobile phone services to try to grow its value-added and financial services business, seeking to drive down data costs for its customers.

Rather than building infrastructure, Pick n Pay will operate as a mobile virtual network operator, or MVNO, using MTN's mobile network infrastructure to offer customers prepaid, SIM-based access to services including airtime, data, and SMS, sold under its PnP Mobile brand, it said on Wednesday.

MVNOs, which typically target the value segment, lease wireless capacity at wholesale prices and resell it at reduced retail prices.

"Our country has a very high mobile phone penetration, but data costs have been a barrier. We believe expanding our services to enter the mobile market will benefit millions of our customers," said Richard van Rensburg, Chief Technology and Services Officer at Pick n Pay.

Africa's most industrialised economy has one of the highest data prices on the continent, according to Competition commissioner Tembinkosi Bonakele. Data costs have come down after mobile operators were forced to cut prices last year.

PnP Mobile, which joins retail peer Mr Price in the MVNO space, will be linked to the retailer's Smart Shopper loyalty rewards program.